Coopetition: A boon for firms, a bane for managers

Abstract

Despite coopetition being a fundamental business strategy that enhances firm performance, it may also harbor a dark side. This study examines the multi-level impact of coopetition intensity on both firm financial performance and well-being of firm's alliance officers, i.e., those employees responsible for managing B2B coopetitive relationships. Integrating resource-based view and paradox perspective, we further examine the moderating role of firms' active (having alliance function) and defensive (relative opportunism) strategies to address coopetition tensions. Through a survey data from whole population of 42 Tanzanian petroleum wholesalers in 533 coopetition relationships, we find that coopetition intensity improves financial performance, particularly for firms that adopt a defensive strategy (relative opportunism) but not for those employing an active strategy (alliance function). Conversely, coopetition intensity negatively affects alliance officer well-being, with active and defensive strategies both surprisingly exacerbating it. These insights underscore the need for firms to balance coopetition's financial benefits with its costs to employee well-being. Consequently, we advance a new era of coopetition research with a new multi-level dark side of coopetition and a contingency approach highlighting how firm active and defensive strategies impact coopetition's benefits and dark sides.